Pennsylvania’s Climate Change Initiatives Entering 2021

January 11, 2021
Thomas M. Duncan, Esq.
MGKF Special Alert - Pennsylvania Forecast 2021

In 2020, Pennsylvania advanced a number of significant regulatory and executive actions that will potentially take effect in 2021.  Some of these actions focus on greenhouse gases (GHGs) generally, while some focus more specifically on particular GHGs, such as CO2 or methane.

Regional Greenhouse Gas Initiative
On November 7, 2020, the Environmental Quality Board (EQB) opened a public comment period on its proposed rulemaking entitled “CO2 Budget Trading Program,” which would establish Pennsylvania as the newest member of the Regional Greenhouse Gas Initiative (RGGI).  A link to the proposed rulemaking is included here.  As of the date of this writing, the comment period for the proposed rulemaking is set to close on January 14, 2021. 

RGGI is an intergovernmental organization consisting of ten member-states (CT, DE, ME, MD, MA, NH, NJ, NY, RI, VT) that has established a market-based cap-and-trade program for CO2 emissions from fossil fuel-fired power plants that have 25 megawatts or more of nameplate capacity and send at least 10 percent of their gross generation to the grid.  In October 2019, Governor Tom Wolf signed Executive Order No. 2019-07 which directed the Pennsylvania Department of Environmental Protection (PADEP) to develop and present to the EQB a proposed rulemaking that would enable Pennsylvania to join RGGI. 

The proposed rulemaking would aim to reduce CO2 emissions from RGGI sources by 25.5 percent between 2022 and 2030.  PADEP expects the auctions of RGGI credits to yield annual revenues of between approximately $179 million and $320 million through 2030.  The Air Pollution Control Act requires that all auction proceeds be directed to the Clean Air Fund “for the use in the elimination of air pollution.”  PADEP has not yet developed a reinvestment plan for the auction revenues but currently intends for potential areas of reinvestment to include energy efficiency, renewable energy, and greenhouse gas abatement.

Based on an analysis conducted by a consultant retained by PADEP, most emission reductions are expected to come from reductions in coal use, while a smaller percentage would come from natural gas.  While Pennsylvania would expect to see a total statewide emissions reduction of 183 million tons of CO2 by 2030, approximately 96 million of that 183 million tons of CO2 emissions would be shifted (i.e., leaked) to other states within PJM territory.  PJM is a regional transmission organization that coordinates the movement of electricity in Pennsylvania, all or parts of twelve other states, and the District of Columbia.  In fact, nearly all of the anticipated reductions in natural gas emissions and generation in Pennsylvania are expected to be leaked to other PJM states.  Largely for these reasons, both the PADEP Air Quality Technical Advisory Committee and the PADEP Citizens Advisory Council failed to pass a vote to concur in the proposed rulemaking, by votes of 9-9-1 and 4-9-1, respectively.

In addition, on November 17, 2020, PADEP informed the EQB that in the first quarter of 2021 PADEP intends to present a report that analyzes the costs and benefits of a rulemaking petition that was submitted by a group of individuals and organizations in 2018 that asked the EQB to establish a cap-and-trade program that would encompass a much broader set of sources than RGGI.  For a more detailed explanation of this pending rulemaking petition, please refer to our prior article here

Methane Emission Standards
On May 23, 2020, the EQB initiated a public comment period on a proposed rulemaking to reduce methane emissions by setting volatile organic compound emissions standards for existing oil and gas operations.  A link to the preamble is included here.  The comment period closed on July 27, 2020, and PADEP is in the process of drafting a final regulation.

Mobile Sources
On December 21, 2020, a group of four northeastern states, including MA, CT, RI, and the District of Columbia, formed the Transportation and Climate Initiative (TCI) by signing on to a Memorandum of Understanding (MOU) with a goal of creating a cap-and-invest program to reduce CO2 emissions from the transportation sector.  The program would specifically target fuel suppliers.  Pennsylvania and seven other states have opted not to sign on to the MOU at this time and instead intend to continue to work with the TCI states to develop the details of the program while pursuing their own state-specific initiatives.  TCI expects to issue a model rule in 2021.

Relatedly, PADEP is developing a proposed rulemaking that would amend PADEP’s Clean Vehicles Program at 25 Pa. Code Chapter 126, Subchapter D, by establishing a requirement for automakers to offer for sale a percentage of Zero Emission Vehicle Program-eligible light duty vehicles as part of their model offerings. 

Finally, PADEP has announced that it is developing a proposed rulemaking that would amend 25 Pa. Code Chapters 121, 129, and 130 to impose additional requirements for the control of hydrofluorocarbons (HFCs) by preventing the future use of HFCs in sources such as air conditioning and refrigeration.  No date has been announced for the proposed rule.